Daily International News 12.02.09 UPDATE

After scrutinizing the personal assets of Yukio Hatoyama and his mother, prosecutors will drop their investigation into the prime minister over a scandal involving fake donations, sources said.

The Tokyo District Public Prosecutors Office has failed to uncover any evidence that shows Hatoyama was directly involved in the falsified political fund reports of his fund management organization, Yuai Seikei Konwa-kai (fraternity association of politics and economics), from 2004 through 2008, the sources said.

Investigators suspect Hatoyama’s former state-funded aide, who was in charge of compiling the political fund reports, acted alone in faking entries.

The entries, concerning 200 million yen in donations, listed as individual donors anonymous people, the deceased and those who never contributed to Hatoyama’s organization.

The reports also contained padded revenues, worth 150 million yen, from the sales of tickets to political fund-raising parties, the sources said.

The investigation into Hatoyama will likely close after prosecutors receive a written statement from the prime minister.

Prosecutors have found that most of the money used for the false entries came from funds belonging to Hatoyama himself or his mother, Yasuko. Therefore, they believe there is little need to question the prime minister, the sources said.

The intensive investigation into the prime minister could end up being a case of revised tax returns.

The possibility remains that 900 million yen in “loans” extended during the five years from Yasuko Hatoyama to her son’s side, including Yuai Seikei Konwa-kai, will be regarded as taxable gifts.

The prime minister is expected to decide whether to amend his tax returns.

A citizens group, citing suspected violations of the Political Fund Control Law, filed criminal complaints against Hatoyama and his two former state-funded aides, one in charge of compiling the reports and the other responsible for accounting.

The former aides were accused of falsifying entries in the political fund reports, while the prime minister was blamed for negligence in appointing and supervising the aide in charge of accounting, as well as falsifying the entries.

Prosecutors have found that 1.15 billion yen was withdrawn between 2004 and 2008 from the funds of Hatoyama and his mother kept by Rokko Shokai, which manages the Hatoyama family’s assets.

Prosecutors suspect the 350 million yen used for the fake entries was part of this money.

The former aide who compiled the political fund reports has apparently admitted to falsifying the entries. He is expected to be indicted.

But the other former aide has told prosecutors that he knew nothing about the fake entries in the reports, the sources said.

Still, prosecutors are considering indicting this former policy aide at a summary court under a Political Fund Control Law stipulation that states that people in charge of accounting can be punished for “serious faults” even if they were not clearly involved in falsified fund reports.

As for the prime minister, prosecutors have decided that it would be difficult to regard him as an accomplice because even his policy aide did not know what was going on, the sources said.

Prosecutors have also determined that Hatoyama cannot be indicted over his responsibility for appointing and supervising the aide. Under law, a politician can be indicted if negligence exists for both appointing and supervising an aide. Investigators found no evidence that Hatoyama was guilty in this regard, the sources said.(IHT/Asahi: December 2,2009)